4-Star Stocks Poised to Pop: Texas Instruments

Based on the aggregated intelligence of 120,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, chip giant Texas Instruments (NYSE: TXN  ) has earned a respected four-star ranking. While five-star stocks have been the best performers, our data has shown that four-star stocks still outshine the market by a significant margin and shouldn't be taken lightly; conversely, low-rated stocks have woefully lagged the market average.

With that in mind, let's take a closer look at Texas Instruments' business and see what CAPS investors are saying about the stock right now.

Texas Instruments facts

Headquarters (Founded)

Dallas, Texas (1930)

Market Cap

$19.80 billion

Industry

Semiconductors

TTM Revenue

$13.57 billion

Management

CEO Richard Templeton (since 2004)

CFO Kevin March (since 2003)

Return on Equity (average last three years)

22.7%

Dividend Yield

2.7%

Competitors

Analog Devices (NYSE: ADI  ) ,

Linear Technology (Nasdaq: LLTC  )

CAPS members bullish on TXN also bullish on

Intel (Nasdaq: INTC  ) ,

Cisco Systems (Nasdaq: CSCO  )

CAPS members bearish on TXN also bearish on

Advanced Micro Devices (NYSE: AMD  ) ,

Motorola (NYSE: MOT  )

Sources: Capital IQ, a division of Standard & Poor's, and Motley Fool CAPS. TTM = trailing 12 months.

Over on CAPS, fully 228 of the 252 All-Star members who have rated Texas Instruments -- some 90% -- believe the stock will outperform the S&P 500 going forward. These bulls include DemonDoug and euphoria96, both of whom are ranked in the top 1% of our community.

Late last month, DemonDoug stated his bull case in Jeopardy-like fashion:

The answer: One with no debt.
The question: What kind of company is most likely to survive a severe downturn, even a depression, and possible U$ dollar deflation (and therefore beat the S&P 500)?

In an earlier pitch from last month, euphoria96 shares that sentiment with this calculated bull call:

This company has an excellent balance sheet and good management. During economic downturns, a lot of people go back to school to retool themselves with new skillsets. This will help [Texas Instruments] with sales in their calculators and other related products. I expect this stock to be much lower but outperform the general market.

What do you think about Texas Instruments, or any other stock for that matter? Make your voice heard on Motley Fool CAPS today. More than 120,000 investors are waiting to hear what you have to say. CAPS is 100% free, so simply click here to get started.

Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Linear Tech is a Motley Fool Stock Advisor pick. Intel is a selection of Inside Value, and the Fool owns shares of Intel. The Fool's disclosure policy always gets a perfect score.


Read/Post Comments (1) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 22, 2009, at 1:54 PM, axel44 wrote:

    in response to euphoria96, let me suggest that anyone who cares to check the quarterly or annual reports will find soon enough that the "calculators" are about 1/10th of the revenues of TXN.

    These are mighty nice products for sure, but the future or the financial strength of this company is not due to the calculators. Furthermore, to say that TXN will do well during the downturn because people go back to school and buy calculators is entertaining (for a brief moment) but simply pointless.

    I read a moment ago that TI is doing well these days thanks to outsourcing most of it chip manufacturing (3yrs ago...)

    This is an other misrepresentation. TI is a very large size manufacturer, "insourcing" most of the chips it sells. Please let us check our facts first.

    This being said, it was a good and important point to mention that the company is without debt... Not a bad position to be in for sure, any time of the year... and especially in difficult times.

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